Bankers Propose Measures To Revive Economy

Dornoo PixThe Ghana Association of Bankers (GAB) says government must quickly take pragmatic measures to save the economy from further dipping.

Key among the measures, the government should generate more revenue, reduce expenditure, control the budget deficit and increase the export base of the economy to generate more foreign exchange.

The President of the GAB, Mr Simon Dornoo who made the call at the 33rd Annual General Meeting of the GAB in Accra on Wednesday, said in the interim,   the government should inject more dollars in the economy to stem the depreciation of the cedi.

He said continuous sliding of the cedi was as a result of the inadequate forex in the market.

Mr Dornoo, who is also the Managing Director of GCB, noted that banks were facing liquidity pressures because they buy few dollars with more cedis to meet the forex needs of their customers.

The GAB President observed that the banking industry was at risk of recording high non-performing loans (NPLs) this year due to the falling rate of the cedi.

Notwithstanding the current economic challenges facing the country, he said the GAB had strong confidence in the economy and assured the banks’ readiness to partner the government to address the situation.

Responding to the concerns that the banks were neglecting small and medium-scale enterprises (SMEs) and the agricultural sector, he said “that assertion is not true”.

According to Dornoo, 90 per cent of the loan portfolios of banks in the country were allocated to the SMEs.

On agriculture, he said the government needed to initiate policies to address the challenges such as land tenure system and poor storage facilities, among others, to reduce the risk of lending to the sector.

Asked why the banks were not listing on the Ghana Stock Exchange, he said the decision lies with the shareholders, adding ‘’if the banks in their own assessment think there is no need for them to raise additional funds from the capital market, we should not fault them.”

The Chief Executive Officer (CEO)  of the Barclays Bank, Mrs Patience E. Akyianu, said though majority of the banks had not listed on the GSE, they had demonstrated “they are here for a long term”, adding that some of the banks have been “operating in Ghana for more than 100 years”.

The Second Deputy Governor of Bank of Ghana (BoG), Dr Abdul Nasiru Isahaku, said in his remark that the BoG was initiating measures to address the spiraling inflation and the falling cedi to boost the economy.

He mentioned the increase of the prime rate to about 300 basis points and the introduction of the forex measures to control the depreciation of the cedi as some of the measures.

Dr. Isahaku called for support from the GAB to help address the challenges facing the economy.


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